Solved by verified expert :Question 1.1.Select the correct statement regarding relevant costs and revenues. (Points : 2) To be relevant, a cost or revenue must be future-oriented and must differ between the alternatives. Sunk costs are relevant for decision-making purposes. Differential revenues are expected future revenues that do not vary between the alternatives under consideration. Avoidable costs are also known as sunk costs.Question 2.2.Which of the following statements is true? (Points : 2) Fixed costs are never relevant for decision making. Opportunity costs are never relevant to decision making. Information does not have to be exactly accurate to be relevant to decision making. A cost that is relevant in one decision context is relevant in other decision contexts. Question 3.3.Hickory Home Company manufactures and sells two lines of furniture, case goods and upholstery. During the most recent accounting period, the Case Goods and Upholstery Divisions sold 15,000 and 2,000 units, respectively. The company’s most recent financial statements are shown below:Case Goods DivisionUpholstery DivisionSales$800,000$200,000Less: cost of goods sold:Unit-level production cost620,000150,000Gross margin180,00050,000Less: operating expenses:Unit-level selling and admin.expense30,00025,000Corporate-level facility exp. (fixed)26,00026,000Net income (loss)$124,000$ (1,000) If unit sales for both divisions increased 10%, the company would report which of the following? (Points : 2) A $26,000 increase in net income for the Upholstery Division A 10% increase in total net income of the company A net income for the Upholstery Division of $1,500 A decline in profit for the Upholstery DivisionQuestion 4.4.All of the following statements describe qualities of the relevance of information except: (Points : 2) relevant information is future oriented. relevant information differs between the alternatives. relevance of information requires a high degree of precision. relevant information includes qualitative as well as quantitative data.Question 5.5.Which of the following is not a possible commonly used term for costs that can be eliminated by taking a specified course of action? (Points : 2) Avoidable costs Differential costs Relevant costs Sunk costsQuestion 6.6.Dwight Corporation provides two kinds of services. During the most recent accounting period, the two service lines produced the following operating results:Service AService BService revenue$80,000$20,000Unit-level costs($50,000)($ 15,000)Product-level costs($10,000)($ 2,000)Company-wide (facility-level) costs($ 5,000)($ 5,000)Net income (loss)$15,000($ 2,000) If the company stops providing Service B, the company’s income will: (Points : 2) increase by $2,000 per year. decrease by $2,000 per year. increase by $3,000 per year. decrease by $3,000 per year. Question 7.7.Alicia brought her lunch today but now a coworker has asked her to go to the deli across the street. Select the correct statement from the following. (Points : 2) The cost of the lunch Alicia already has is relevant to Alicia’s decision to have lunch with her friend. The cost of the lunch Alicia already has represents the opportunity cost of dining with her friend. The cost to buy lunch at the deli is not relevant because it has not yet been incurred. The cost of the lunch that Alicia brought has nothing to do with her current decision because it is a sunk cost.Question 8.8.Select the correct statement regarding relevant costs and revenues. (Points : 2) Sunk costs are not relevant for decision-making purposes. Relevant costs are frequently called unavoidable costs. Direct labor is an example of a batch-level cost. Only variable costs are relevant for decision making.Question 9.9.Brannon Company plans to add a new item to its product line. Two possible products are under consideration. Each unit of Product A costs $12 to produce and has a contribution margin of $6, while each unit of Product B costs twice as much and has a contribution margin of $8. What is the differential revenue for this decision? (Points : 2) $2 $6 $14 $18 Question 10.10.The cost that is avoided when a company eliminates a single item of a product or service is a: (Points : 2) batch-level cost. facility-level cost. product-level cost. unit-level cost.Question 11.11.Which of the following items typically found on the selling and administrative expense budget will also impact the cash budget? (Points : 2) Utilities Administrative salaries Advertising expense All of the aboveQuestion 12.12.Planning concerned with long-range decisions such as defining the scope of the business is referred to as: (Points : 2) operations budgeting. strategic planning. capital budgeting. master planning.Question 13.13.Which of the following items will notappear on a cash budget? (Points : 2) Expected cash payments Budgeted sales on account Expected cash collections All of the above will appear on a cash budgetQuestion 14.14.Crowe Company expects the following total sales: MonthSalesMarch$30,000April$20,000May$30,000June$25,000 The company expects 70% of its sales to be credit sales and 30% for cash. Credit sales are collected as follows: 25% in the month of sale, 72% in the month following the sale with the remainder being uncollectible and written off in the month following the sale. The budgeted accounts receivable balance on May 31 is: (Points : 2) $14,350 $15,750 $20,550 $22,500Question 15.15.Select the incorrectstatement about the master budget. (Points : 2) The master budget is a group of detailed budgets and schedules representing the company’s operating and financial plans for the past accounting period. The master budget usually includes operating budgets, capital budgets and pro forma financial statements. The budgeting process usually begins with preparing the operating budgets. Preparing the master budget begins with the sales forecast.Question 16.16.Budgeted depreciation expense would not appear on a: (Points : 2) cash budget. budgeted income statement. selling and administrative expense budget. all of the above.Question 17.17.Haltom Corporation has prepared its sales budget for 2010. Sales on account are expected to be $500,000 in January and $600,000 in February. Haltom generally collects 40% of its sales on account in the month of sale and 58% in the month after sale. The remaining 2% is uncollectible. Based on this information, what amount of cash should Haltom expect to collect in February 2010? (Points : 2) $638,000 $519,400 $530,000 $550,000Question 18.18.Select the incorrect statement about budget committees. (Points : 2) Budgeting committees usually have responsibility for the coordination of budgeting activities. Membership on the budgeting committee is restricted most often to accountants because the budget involves numbers. The budgeting committee is responsible for settling disputes between various departments over budget matters. One of the responsibilities of the budget committee is to monitor the organization’s progress toward achieving its budget standards.Question 19.19.Wakefield Company wants an ending inventory each month equal to 30% of that month’s cost of goods sold. Cost of goods sold for February is projected at $90,000. Ending inventory at the end of January was $24,000. Based on this information, purchases for February will be: (Points : 2) $63,000 $66,000 $87,000 $93,000Question 20.20.Select the incorrectstatement about the planning process. (Points : 2) The longer the time period, the less specific the plans. Planning decisions can often be sub-divided into three distinct planning phases, short-term, intermediate-term, and long-term. The nature of planning changes with the length of the time period being considered. The shorter the time period, the more general the plans.

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